Jim Flaherty, Canada’s former No. 1 money man, could make as much as $2-million salary in private sector

The relatively strong fiscal track record Jim Flaherty leaves behind as finance minister, plus his deft ability to navigate the thorny political landscape, gives the politician his pick of private-sector roles with a salary of as much as $2-million a year, compensation experts say.

Mr. Flaherty resigned from his high-profile post on Tuesday, to “focus on life beyond politics” in the private sector, though he doesn’t appear to have landed a job yet.

It won’t be a tough slog.

The skills demonstrated during the 64-year-old lawyer’s eight-year-plus tenure as Canada’s No. 1 money man could land him a job as rainmaker at a law firm, sitting on the board of directors of a large-cap company, or a senior position at one of the country’s banks, the latter potentially paying between $1-million to $2-million, says compensation expert Ken Hugessen.

Who would have had access to more information and contacts than Jim Flaherty?

That’s quite the pay bump from the standard cabinet minister’s salary of $236,900, and a bright prospect as Mr. Flaherty nears retirement age.

“His knowledge in terms of what is going on in this country, probably is right now, unparalleled,” said Mr. Hugessen, whose company Hugessen Consulting advises boards of directors on executive pay and related governance issues.

“Who would have had access to more information and contacts than Jim Flaherty? It’s hard to think of anyone. That combination of where he has been, and the profile he’s had, and the skill with which he’s handled it … that package doesn’t show up very often.”

Here’s a closer look at what lucrative paths lay ahead in the private sector for Mr. Flaherty:

Senior role at a bank: Without a doubt, any of the major banks would consider Mr. Flaherty as a prospect, said Paul Gryglewicz, managing partner of executive compensation consultants Global Governance Advisors. In a such a role, perhaps working on managing the bank’s risk from a policy standpoint, could net pay near or above $1-million, with other compensation as part of the package linked to equity pushing that near $2-million, he said. “With the deferred compensation structure in banks, it does definitely set him up for a nice retirement kind of platform,” Mr. Gryglewicz said.

Rainmaker at a law firm: Taking a role as partner or advisor at a law firm is a popular landing spot for many politicians post-public life, prime ministers Jean Chrétien and Pierre Trudeau among them. With Mr. Flaherty’s legal background, it would appear well suited for his skill set. The compensation would range widely, as it is linked to the proportion of time he is expected to allocate as well as the category of law firm, but it would offer less money than the deep pockets of a bank, said Mr. Hugessen. Still, it would likely not be less than $500,000 annually, said Mr. Gryglewicz.

Board of directors, either as chairman or member: Mr. Flaherty would also be sought after as a strong addition to company boards, and with his people skills, he could end up chairing one, said Mr. Hugessen. This could be taken on in addition to working at a law firm or bank. The chair of a board of a large Canadian company earns somewhere between $350,000 and $600,000, with many grouped around $400,000 a year. Directors at large companies are in the $250,000 range. Taking on a portfolio of larger boards, which would still be far less of a workload than that of finance minister, would generate a salary of near $1-million, Mr. Hugessen said. “He could step back, essentially working part-time probably a couple of days a week, and sit on a couple of boards, and make $700,000 or $800,000 a year, easily,” said Mr. Hugessen. An active board member, for one of the top 100 companies on the Toronto Stock Exchange, would be paid between $100,000 to $200,000, said Mr. Gryglewicz.

Private equity: Mr. Flaherty could also decide to spread his wings and work south of the border, or across the pond. It is understood that he visited KKR, a New York investment firm run by his friend, Henry Kravis, before delivering his final budget last month. It’s unclear whether that’s an indication of his career direction, but if so, it would be a lucrative one as well. The salary range there is varied as well, largely linked to the success of the fund, but partners at major private equity firms make “tens of millions, even hundreds” in compensation, said Mr. Hugessen. Although Mr. Flaherty already has established relationships with finance officials on the international stage, it is more realistic that Mr. Flaherty would stay close to home, he added. “That’s always a possibility, but his franchise, he has a much stronger name recognition here than there,” he said.

Non-profit: Another option would be for Mr. Flaherty to choose a role in the non-profit sector, which would naturally come with a much smaller salary. Given his priority over the years to introduce measures that improve the well-being of people with disabilities — a cause with personal resonance, as one of his three sons has a disability — he may look for other opportunities outside of the purely corporate world. “He may for personal reasons choose to do something that is not all that remunerative,” Mr. Hugessen said.

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